2013 (3) TMI 577 - HC - VAT and Sales Tax

Summary

Issues involved: Interpretation of section 42(4) of the U.P. Value Added Tax Act, 2008 regarding refund of tax paid by agent on behalf of the assessee granted exemption under section 4A of the U.P. Trade Tax Act, 1948.

Summary:
The judgment by the Allahabad High Court addressed multiple revisions concerning the same assessee, focusing on the Tribunal's decision to refund tax not directly deposited by the dealer but by the dealer's agent in accordance with section 42(4) of the U.P. Value Added Tax Act, 2008. The assessee, previously granted exemption under section 4A of the U.P. Trade Tax Act, 1948, claimed a refund based on this exemption. The Tribunal allowed the refund, prompting a challenge by the revenue's counsel who argued that since the tax was paid by the agent, the assessee was not entitled to the refund as per section 42(4)(d) of the Act.

The Court dismissed this argument, stating that the crucial factor is that the tax was deposited on behalf of the assessee and due to the exemption granted under section 4A of the U.P. Trade Tax Act, 1948, the assessee was eligible for the refund. The Court emphasized that section 42(4)(d) requires the payment of net tax along with the tax return for exemption by way of refund, regardless of whether it was paid by the assessee or their agent. Therefore, as long as the net tax was deposited on behalf of the industrial unit granted exemption, the refund was permissible.

The judgment highlighted that the actual payer of the tax, whether the principal or the agent, is irrelevant as long as the conditions specified in section 42(4)(d) are met. The Court concluded that the language of the provision clearly supports the allowance of the refund when the tax has been deposited and the exemption criteria are fulfilled. Consequently, the Court found no merit in the revisions and dismissed them.